Verizon Wireless Confident Cable Deal Approval Pending

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August 10 2012 @ 13:19

In spite of opposition from dozens of lawmakers on Capitol Hill, consumer groups and other critics, Verizon Wireless anticipates receiving approval from regulators this summer to co-market services with Comcast and other leading cable companies and purchase billions of dollars worth of spectrum from them.

“We are working productively with the FCC and DoJ to address their concerns, and we are confident that we remain on track to receive the necessary approvals this summer,” Verizon spokesman Ed McFadden said in an email Friday.

U.S. regulators are thought to be in the final stages of review of the deals, and a decision could be announced in the coming weeks.

The Federal Communications Commission in is day 168 of its informal 180-day review, although the agency states on its website that several factors could cause its review to exceed 180 days. Gina Talamona, a spokeswoman for the U.S. Department of Justice, said Friday review is “ongoing” but declined further comment.

Critics of the agreements have claimed the deals represent an accord between Verizon and the cable companies to collaborate rather than compete, which will result in fewer choices and higher prices for U.S. consumers who purchase TV, wireless and high-speed Internet services.

“We want firms to compete, not capitulate or collaborate,” said Rep. Jerrold Nadler, a New York Democrat, during a call Friday hosted by the union Communications Workers of America. The CWA represents Verizon workers and has been a harsh critic of the deals.

Verizon Wireless also has faced accusations that its parent Verizon Communications will have little to no incentive to build out its high-speed FiOS network to more communities such as Buffalo, N.Y. since it can sell competing cable TV and broadband Internet services.

“This deal is anti-city, it’s anti-rural communities, it would render digitally challenged and inferior the cities of upstate New York including Buffalo and the rural communities of New York State,” Rep. Brian Higgins, another Democrat from New York, said during the call. “The fact is that a substantial consumer harm would occur if this deal between Verizon and the nation’s biggest cable companies were allowed to go through.”

Responding to the criticism over FiOS, McFadden explained that Verizon announced years ago it would end its rollout of FiOS at 18 million homes; already the New York-based telecom giant passes close to 17 million homes.

“[W]ith the vast number of build out commitments across our footprint, we continue to fully deploy in Washington, DC, Philadelphia, New York, and communities across the region and are focused on meeting those build out commitments rather than seeking new franchise opportunities,” he said in an email.

It’s plausible Verizon Wireless will agree to make substantial concessions rather than risk outright opposition and litigation from regulators who are reviewing the deals to determine whether they are in the public interest and don’t violate antitrust law.

Parul Desai, communications policy counsel for Consumers Union, said one of those conditions should include a limit on the duration of joint marketing and operating agreements.

“Overall, we don’t think this transaction is in the public interest,” Desai said.

David Balto, a public interest antitrust attorney and former assistant policy director with the Federal Trade Commission, expressed his belief that the FCC and DOJ are getting the message.

“I’m involved in merger advocacy all the time. I’ve never seen a merger with such groundswell of opposition on all levels, congressmen, mayors, consumers, thousands of comments filed … and I think it’s the kind of thing that will resonate in both of the agencies,” he said.

Earlier this summer, T-Mobile USA withdrew its opposition to the cable agreements after Verizon Wireless and T-Mobile USA announced plans to swap spectrum. T-Mobile USA revealed that the VzW pact would improve its spectrum position in 15 of the largest 25 markets and help it with its plans to deploy 4G LTE service next year. The FCC recently decided to consolidate its review of the Verizon Wireless/T-Mobile transactions with its analysis of the cable deals.

The cable agreements involve Bright House Networks, Comcast, Cox and Time Warner Cable. Collectively, the companies are selling spectrum to Verizon for roughly $3.9 billion. Verizon Wireless has said the deals will help it meet the growing demand for wireless broadband services.

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